Digital Medical Hubris

Now the other shoes begin to drop. Voters knew in November that many of the promises Obama made in 2008 had been broken. The economy had not revived as he had promised it would (“or we’ll be talking about a one-term proposition”). He has not “changed the tone in Washington” – except for the worse. He didn’t prevent lobbyists from holding positions in his administration. He didn’t cut the deficit in half; he increased it radically. But voters apparently decided that the president deserved credit for good intentions.

How long will that indulgence last? The next four years, whatever else they may bring, will tally the results of Obama’s first term policies. Some of those will not be felt until 2014, when Obamacare comes fully online. Others will be subtle, like the depressing effect of Dodd/Frank on lending. Still others will be obvious – Obama’s “chickens coming home to roost.”

One of these deserves close attention because it so perfectly captures what’s wrong with the president’s (and the Democratic Party’s) approach to government.

Remember Mr. Obama’s pet project to improve American medical care by moving to digital medical records? Candidate Obama talked it up in 2008, and the newly-elected president inserted it into the stimulus bill in 2009. Switching from paper to digital medical records, Obama said, would reduce the cost and improve the quality of care. It would “cut waste, eliminate red tape and reduce the need to repeat expensive medical tests.” Digital records would also reduce “deadly but preventable medical errors that pervade our health care system.”

Because Obama thought it would be a good idea, because it seemed like common sense to him, U.S. taxpayers spent $19 billion to transition doctors' offices and hospitals to electronic systems. Doctors and hospitals that adopt digital systems are eligible for payments from Uncle Sam. Those who fail to comply will be punished with declining Medicare reimbursements starting in 2015. It’s a coercive, top-down, big government “solution” in search of a problem.

It might be a good idea to adopt digital medical records. But the “common sense” way to do it would be through an organic, grassroots system in which doctors and other health professionals tested systems and selected those that worked best for the money expended. Only doctors themselves are in a position to judge whether switching to an electronic system makes them more or less efficient. Doctors would not spend the money unless they were confident that such technology would be worth the price.

If the government is paying for it, such calculations fly out the window. In fact, with the government coercing adoption, bad decisions are inevitable.

A number of studies and reports are filtering in showing that government-sponsored digital medical records have not reduced medical costs. A study in the journal Health Affairs found that offices with digital medical records were 40 to 70 percent more likely to order diagnostic tests – thus increasing medical spending. Doctors have also raised privacy concerns. Patient confidentiality is strictly regulated by the 1996 HIPAA law. Unauthorized releases could leave physicians vulnerable to lawsuits. But many of the existing software systems fail to protect confidentiality.

As with so much government cash, we have no idea whether it really gets spent on the intended ends. HHS has issued a report suggesting that Medicare officials have failed to verify whether the health professionals who got the government cash to adopt digital systems have actually used them. None of the payments has been audited.

The RAND Corporation, which had issued a cheerleading report in 2005 arguing that the U.S. could save $81 billion a year by adopting digital records, has issued a new report suggesting that its original estimates were, ahem, optimistic. “Evidence of significant savings is scant,” reports The New York Times, “and there is increasing concern that electronic records have actually added to costs by making it easier to bill more for some services.”

The latest RAND study notes that many of the electronic records systems are hard to use and lack interoperability. Anecdotal evidence suggests that doctors hate them. Like all computer-based systems, they are vulnerable to crashes. Dr. David Brailer, the health information czar under George W. Bush summed it up well for the Times, “The vast sum of stimulus money flowing into health information technology created a ‘race to adopt’ mentality – buy the systems today to get government handouts, but figure out how to make them work tomorrow.”

If then, but taxpayers will never see that $19 billion again. That’s Democratic leadership – less efficiency at higher prices.

"How prone all human institutions have been to decay; how subject the best-formed and most wisely organized governments have been to lose their check and totally dissolve; how difficult it has been for mankind, in all ages and countries, to preserve their dearest rights and best privileges, impelled as it were by an irresistible fate of despotism." —James Monroe, speech in the Virginia Ratifying Convention, 1788